Culture is everything

Part III (Culture) was particularly interesting to me because one of the main reasons I wanted to work for Rational was the company culture, and I was concerned about its compatibility with IBM's culture. Many Rational tech reps (myself included) say they have enjoyed working at Rational because the company culture empowers individuals to make a difference. Fortunately, company culture was another of Gerstner's main targets for change:

Until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization's makeup and success -- along with vision, strategy, marketing, financials, and the likeý I came to see, in my time at IBM, that culture isn't just one aspect of the game; it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.

Gerstner's most important and proudest accomplishment was to institute a culture that brought IBM closer to its customers by inspiring employees to drive toward customer-defined success. Now, the company's strong customer focus will allow Rational to continue pursuing the same mission that has guided us for more than twenty years.

Wisdom and Insights

There are nuggets of wisdom throughout the last two sections of the book. In "Lessons Learned" and "Observations," Gerstner points out that some integrator, fundamentally acting in a service role, controls every major industry. This was the basis for building IBM Global Services. Another shrewd Gerstner insight is that every major industry is built around open standards. It was this realization that led IBM Software to enable and build on open standards in a network-centric world, and Gerstner provides a compelling argument for abandoning proprietary development and embracing software standards (e.g., J2EE and Web Services). In fact, Gerstner argues that the most valuable technology companies are OEM suppliers who leverage their technology wherever possible; therefore, IBM must actively license its technology in order to be successful. The book's three appendices contain, respectively, some interesting e-mail correspondence, Gerstner's vision of e-business (including the IBM IT On Demand, autonomic, and grid computing initiatives), and a financial overview of IBM from 1992 to 2002.

The latter clearly demonstrates that Gerstner got results. Although many people criticized IBM for selecting a non-technical CEO, based on IBM's performance during his reign (and the insight he reveals in this book), Gerstner was definitely the right person for the job. His reinvention of IBM was one of the most dramatic corporate turnarounds of the twentieth century, and the numbers in Appendix C of this book will certainly shut the mouths of any would-be critics.

Before opening this book, I had assumed it was Gerstner's autobiography and would highlight not only his IBM career, but also his years at the consulting firm McKinsey and Company and his executive tenure at American Express and RJR Nabisco. I also assumed that, as is typical of many books by high-profile executives, the book was ghostwritten in part. Gerstner dismisses both of these assumptions in the foreword. Not only did he write the book himself, he claims, but also the book deals (as the subtitle "Inside IBM's Historic Turnaround" suggests) almost exclusively with Gerstner's IBM years.

Under other circumstances I might regard this book as just another well written and interesting memoir from a captain of capitalism; both Rational employees and Rational customers now have a stake in the success of IBM and will gain a better understanding and appreciation of the company by reading this book.

For further reading about IBM's past, I also recommend:

• The Maverick and His Machine: Thomas Watson, Sr. and the Making of IBM by Kevin Maney (John Wiley and Sons, 2003).
• Father Son and Co.: My Life at IBM and Beyond, by Thomas J. Watson Jr. and Peter Petre (Bantam Books, 1990).

Acknowledgments

Special thanks to Sam Guckenheimer for his contribution to this review.